Impact of Environmental Management on Sustainable Performance of Pakistani Entrepreneurial Firms: The Mediating Role of Green Product Innovation and the Moderating Effect of Transformational Leadership

The relationship between environmental management and firm performance is evident but not conclusive because of the diversified findings of existing studies that have been conducted in different contextual settings. This study separates environmental management into two dimensions—environmental management depth and environmental management breadth—based on the number of environmental management techniques used by entrepreneurial firms and the level of integration of environmental management with other functions. The framework was created with the theoretical backing of the resource-based perspective. Structural equation modeling was utilized to evaluate the assumptions on a sample of 384 entrepreneurial Pakistani firms. The findings demonstrate a direct relationship between environmental management and the long-term viability of entrepreneurial firms. Furthermore, the relationship between environmental management depth and environmental management breadth and the sustainable performance of entrepreneurial firms is mediated by green product innovation. Furthermore, transformative leadership attenuates the effects of both environmental management depth and environmental management breadth on the long-term viability of entrepreneurial firms.